The thyroid hormone (triiodothyronine, T3) is essential for normal brain maturation. To determine the mechanisms by which T3 controls neuronal proliferation and differentiation, we have analyzed the effect of this hormone on the expression and activity of cell cycle-regulating molecules in neuroblastoma N2a-beta cells that overexpress the beta1 isoform of the T3 receptor. Our results show that incubation of N2a-beta cells with T3 leads to a rapid down-regulation of the c-myc gene and to a decrease of cyclin D1 levels. T3 also causes a strong and sustained increase of the levels of the cyclin kinase inhibitor p27(Kip1). This increase is secondary, to the augmented levels of p27(Kip1) transcripts as well as to stabilization of the p27(Kip1) protein. The increased levels of p27(Kip1) lead to a significant increase in the amount of p27(Kip1) associated with cyclin-dependent kinase 2 (CDK2), and to a marked inhibition of the kinase activity of the cyclin.CDK2 complexes. As a consequence, the retinoblastoma protein (pRb) and the retinoblastoma protein-related protein p130 are hypophosphorylated in T3-treated N2a-beta cells. This study shows for the first time that T3-mediated growth arrest and neuronal differentiation are associated with an increase in the levels of a cyclin kinase inhibitor, which does not allow the inactivation of retinoblastoma proteins required for progression through the restriction point in the cell cycle.